Attack at Godric Hollows

The attack at Godric's Hollow took place on 31 October (Hallowe'en), 1981. The attack happened not even a week after Peter Pettigrew was made the Potters' secret keeper, when he gave up their location to Lord Voldemort.
 * "All anyone knows is, he turned up in the village where you was all living, on Hallowe'en ten years ago. You was just a year old. He came ter yer house an' — an' — 'You-Know-Who killed 'em. An' then — an' this is the real myst'ry of the thing — he tried to kill you, too... But he couldn't do it. Never wondered how you got that mark on yer forehead? That was no ordinary cut. That's what yeh get when a powerful, evil curse touches yeh — took care of yer mum an' dad an' yer house, even — but it didn't work on you, an' that's why yer famous, Harry."
 * —Rubeus Hagrid describing the attack[src]

Having been told half of the Prophecy by Severus Snape, Voldemort came to believe his mortal enemy to be Harry Potter and traveled to the Potter's home in Godric's Hollow. While in the Potter's home he murdered James and Lily Potter, who died protecting an infant Harry. When he attempted to murder Harry, Lily's loving sacrifice allowed Harry to live and Voldemort's soul was ripped from his destroyed body.

Prophecy
About a year before Harry's birth, Sybill Trelawney met Albus Dumbledore in the Hog's Head to interview for the Divination professorship at Hogwarts School of Witchcraft and Wizardry. During the interview, Trelawney slipped into a trance and delivered a prophecy. This prophecy referred to a young boy born at the end of July whose parents had defied Voldemort three times. It said that the boy would have power that Lord Voldemort lacked and that the boy would be able to defeat the Dark Lord.
 * "The one with the power to vanquish the Dark Lord approaches... Born to those who have thrice defied him, born as the seventh month dies... and the Dark Lord will mark him as his equal, but he will have power the Dark Lord knows not... and either must die at the hand of the other for neither can live while the other survives... The one with the power to vanquish the Dark Lord will be born as the seventh month dies...."
 * —Sybill Trelawney's first prophecy[src]

Death Eater Severus Snape was eavesdropping at the keyhole, but he was interrupted by the barman, but not before he had heard half of the prophecy. Immediately, Snape took everything he had heard to Voldemort, who decided that the boy was Harry Potter, although it could very well have been Neville Longbottom. When Snape found out that Voldemort had decided to eliminate the Potter child, he begged his master to spare Lily Potter

James/Lily Potter's Death

 * "Lily, take Harry and go! It's him! Go! Run! I'll hold him off!"
 * —James Potter moments before his death
 * Lily: "Not Harry, please no, take me, kill me instead —"
 * Lord Voldemort: "This is my last warning —"
 * Lily: "Not Harry! Please... have mercy... have mercy... Not Harry! Not Harry! Please — I'll do anything...."
 * — Lily stands between Lord Voldemort and her son

Once the Potters were aware that Voldemort was after their son, Albus Dumbledoreadvised them to go into hiding using the Fidelius Charm. The Potters did so, moving to Godric's Hollow, suggesting that Sirius Black be their Secret-Keeper. However, Sirius felt that this was a rather obvious move, as he and James were best friends, so he suggested that Peter Pettigrew be the Secret-Keeper instead. In the interest of secrecy, the Potters agreed and told no one else, not even Dumbledore.[1]

However, Pettigrew had been working as a double agent for the Death Eaters and told Lord Voldemort of the Potters' whereabouts. Voldemort traveled to their home on Hallowe'en. Upon arriving, he saw James, Lily, and Harry in the same room, James playing with Harry. Seeing Voldemort coming, James gave Harry to Lily, shouting that she take him to safety.

Voldemort then entered the house, quickly murdering James who was going for his discarded wand. He then proceeded upstairs to kill the boy. He found Lily and Harry locked in a room with furniture blocking the door. Faithful to Snape's request, Voldemort asked the unarmed Lily, who was guarding the cot where Harry sat, to step aside, but Lily did not move. Voldemort warned her several times, but she refused to stop protecting her son. When she did not move again, he murdered her. He then proceeded to murder Harry. Lily's loving sacrifice protected Harry, something that Voldemort did not realise as he was unable to understand or feel love. When Voldemort went to murder him, the spell rebounded. It struck his body obliterating his corporeal form and driving his completely unstable soul out of the body. Since his soul was as unstable as it was a bit of his it splintered off and attached itself to the only living being left in the cottage, Harry himself. Harry survived with just a lightning bolt scar on his forehead, while his parents were dead. this incident sealed Harry's fate and labeling him the "Boy Who Lived".

Hagrid's Rescue

 * "Is it true, Albus? Lily and James... are dead?"
 * —Minerva McGonagall after hearing of the attack[src]

The effects of Voldemort's curse went beyond just the two wizards; half of the top floor of the house was blown apart by the rebounding curse. Albus Dumbledore was immediately alerted that something significant had happened.[2] Rubeus Hagrid arrived soon after and rescued Harry Potter from the ruins. After realizing Peter Pettigrew's betrayal, Sirius Black came to the house. He offered to take Harry, but Hagrid refused on Dumbledore's orders. Sirius then lent Hagrid his motorbike and went off the seek revenge on Peter. Also that night, Peter Pettigrewvisited and retrieved the Dark Lord's wand, hiding it in an undisclosed location. Sometime later, the house was made invisible to Muggles and left in its ruined condition as a memorial to the Potters.

As a portion of Voldemort's soul resided in Harry, the two shared a bond, causing Harry to feel Voldemort's anger or happiness. Also, as the Dark Lord grew more and more powerful, Harry began to see into his mind, seeing Voldemort's thoughts and actions, sometimes through his senses. Harry also dreamed about things Voldemort wanted or things he was obsessing over.

In 1993, whenever Harry was affected by the effects of Dementors of Azkaban, he heard memories of what occurred during the attack before Lily's death and in 1997, while sharing Voldemort's mind, Harry viewed the entire attack, that Voldemort at the time was recalling.